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Announcement of Protection for R1,7 Billion Cut-Flower Export Industry (The Department of Trade, Industry and Competition)
Minister of Trade, Industry and Competition, Ebrahim Patel, today announced that the application submitted by Cape Flora SA to protect the name “Cape Flora” and its logo has been approved and has been published in the Government Gazette. The next step will be for Cape Flora SA to apply for a Geographical Indication (GI), and the industry is considering this.
GIs are signs or logos identifying goods that have a specific geographical origin and possess a given quality, reputation or other characteristic that is essentially attributable to that origin. Rooibos, Honeybush and Karoo Lamb all are registered GIs and are subject to international protection.
South Africa is currently the third-largest exporter of cut flowers on the African continent with exports of over R1,7 billion in 2021. Cape Flora SA, the fynbos cut-flower association, says South African flower exports are dominated by the indigenous flora (proteas, pincushions, greens), most of which are cultivated in the Western and Eastern Cape, but also sustainably harvested from the veld. The Cape Floristic Region is one of the most biodiverse areas in the world and therefore contains incredible species diversity.
the dtic to Host AfCFTA Provincial Awareness Workshops Across South Africa (The Department of Trade, Industry and Competition)
The Department of Trade, Industry and Competition (the dtic) will host a series of awareness workshops on the African Continental Free Trade Area (AfCFTA) throughout the country starting at the Pavilion Hotel in Durban, KwaZulu-Natal on Thursday, 25 May 2023.
The aim of the Provincial Awareness Workshops is to communicate and engage private sector, Small and Medium Enterprises, as well as women and youth-owned business on the implementation of the AfCFTA, including the opportunities for South Africa to participate in preferential trade beyond the Southern Africa region
According to the Deputy Director-General of Exports at the dtic, Ms Lerato Mataboge, the objective of these workshops is also to identify companies, within the provinces, in the targeted sector masterplans, as well as other priority sectors to export to the rest of the continent.
She adds that the inaugural AfCFTA Business Forum hosted in Cape Town last month created a platform where both the private and public sector from across the continent were encouraged to work together in the implementation of the AfCFTA.
“African economies were urged to prioritise closing the infrastructure gap in order to increase intra-Africa trade by over 30% in order to fully realise the potential of the AfCFTA. For instance, it was noted that transportation infrastructure alone has the potential to double the transportation of goods by air from 2.3 million tons to 4.5 million tons,” says Mataboge.
DR Congo Leader to Visit China This Week, Minerals Trade Deal Signing Expected (VOA)
The president of minerals-rich Democratic Republic of Congo, Felix Tshisekedi, will visit China from May 24 to 29 and is expected to meet President Xi Jinping to review and sign several key trade deals.
A meeting would pave the way for the two countries to formally overhaul and seal a $6 billion infrastructure-for-minerals deal with Chinese investors. The visit was announced by the Chinese foreign ministry on Monday.
During the visit to China, the two heads of state will hold talks and attend the signing ceremony of cooperation documents together, the Chinese foreign ministry said.
“Both sides have always supported each other on issues related to each other’s core interests and major concerns. In recent years, political mutual trust between China and the Democratic Republic of Congo has been continuously deepening, and practical cooperation has yielded fruitful results,” Mao added.
Kenya begins shipping fruits, flowers by sea (The East African)
Kenya has last week began transporting horticultural produce by sea in a move officials say will reduce the carbon footprint and improve earnings. This follows a pact with the European Union, one of Kenya’s major export destinations, to transport fresh produce via sea after Mombasa port complied with requirements.
It means all verification of perishable goods by regulatory agencies will be done at the point of loading and permit approvals granted at the single window system to facilitate track-and-tracing. With the installation of the reefers, Kenya intends to use Mombasa to end dependency on air freight for horticulture produce.
Consumers, especially in Europe, are on the frontline of this push for a radical decarbonisation of value chains that deliver fresh produce to their supermarket shelves and dining tables.
Several companies have started to use sea freight for export of flowers, vegetables and fruits but the sector is now aiming for a transformative and larger shift in the push for climate change action.
Dar port’s $357m upgrade bears fruit, topples Mombasa from perch (The East African)
The $357 million Dar es Salaam Maritime Gateway Project (DMGP) seems to be bearing fruit: The World Bank has put Dar above its main regional competitor, Mombasa, in a new port efficiency ranking.
The Port of Dar es Salaam rose to position 312 in the 2022 Container Port Performance Index (CPPI) against Mombasa’s position 326 in the survey of 348 ports globally, making it the preferred facility by East African shippers. Djibouti ranked at 26 and the port of Berbera (Somalia) at 144.
Dar port managers attribute the noted success to infrastructure improvements and capacity building, which have helped address operational and physical constraints at the facility.
Tanzania and India explore local currency trade to reduce dependency on dollars (Business Insider Africa)
Following the recent declaration that both nations will start trading in their own indigenous currencies, they talked about the ramifications of the Rupee Nostro Account System. The debate emphasized several major benefits, one of which was the decrease in dependence on hard currency.
The system has enormous potential for corporate organizations, which can efficiently manage their foreign exchange balances and avoid exchange risks associated with fluctuating global currencies, according to Mr. Antaryami Sarangi, managing director of Bank of India in Tanzania.
The system’s potential to reduce the need for ongoing currency conversions and dependence on foreign exchange reserves encouraged stakeholders.
“The banking sector also stands to gain from implementing this system. Banks could facilitate importers by providing them with increased flexibility and reduced dependencies on hard currencies. This would streamline trade processes and enhance the overall efficiency of cross-border transactions,” he said.
Kenya, Uganda signal recovery on coffee front (The East African)
Kenya and Uganda are expected to increase their coffee exports in the marketing year 2023/24, as government efforts to increase production come to fruition. According to a forecast by the Global Agricultural Information Network-Gains, Uganda’s production will reach a record high of 6.85 million 60 kilogramme bags, a 4 percent increase attributed to good rainfall and the maturation of new high-yielding Robusta variety planted between 2017 and 2019.
Kenya’s production is forecast to increase 6.7 percent to 800,000 bags due to recovery from drought conditions and higher fertiliser application.
While Kenya’s total area harvested is expected to remain flat, at 105,000 hectares, due to a shortage of planting materials and losses associated with conversion of coffee plantations to real estate, in Uganda the acreage under coffee is increasing.
IMF Executive Board Concludes 2023 Article IV Consultation with Mali (IMF)
Mali’s economy has been hit by multiple shocks since 2020 but remained resilient in 2022 amid high inflation. Real GDP growth increased from 3.1 percent in 2021 to 3.7 percent in 2022, despite elevated security and socio-political challenges, regional sanctions in the first half of 2022 and a high incidence of food insecurity. Growth is projected to rebound to over 5 percent in 2023 and 2024, assuming strong agricultural and gold output. However, the economic outlook is subject to significant downside risks. They include a worsening security situation, potential election delays, volatile international commodity prices, tighter global financial conditions, and climate risks.
Mali’s current account deficit improved slightly in 2022, down to 6.9 percent of GDP from 7.5 percent in 2021, on account of higher gold exports and lower capital goods imports. In the medium term, the current account deficit will fall to below 4 percent due to strong gold and agricultural exports.
Kingdom of Lesotho: Staff Concluding Statement of the 2023 Article IV Mission (IMF)
While the COVID-19 health crisis has largely abated, Lesotho’s structural challenges and capacity constraints have reasserted themselves as severe obstacles to growth. The secular decline of key sectors continues to weigh on the economy with growth largely dependent on infrastructure mega-projects and developments in South Africa. While growth averages 2.1 percent over the medium term, it is expected to decline once phase II of the Lesotho Highlands Water Project has passed its construction peak. The war in Ukraine raised prices to the benefit of the mining sector but eroded living standards and food security. Inflation is expected to have peaked in FY22/23 and subside gradually over the medium term to just under 5 percent as global food and energy prices ease.
While recent transfers from the Southern African Customs Union (SACU) (over 20 percent of GDP) present an opportunity—if well-managed—to finance fiscal adjustment and alleviate financing constraints, the fiscal outlook is highly sensitive to changes in revenue and expenditure should reform momentum slip, with implications for debt and the external position.
The growth outlook remains subdued and contingent on undertaking fiscal consolidation and structural reforms in tandem, alongside external developments .
Angola casts net wider to scale up fish exports (UNCTAD)
Angola boasts a vast coastline, ample labour in the fisheries sector and good trading relations with major fish importers in Europe and Asia. With the fish traded globally expected to rise from 187 million tons in 2018 to 250 million tons by 2030, Angola stands to benefit from this opportunity.
Angola overly depends on crude oil, which represents 93% of its exports. Low productivity and meagre opportunities in other economic sectors have left a third of the population below the poverty line. Fluctuating oil prices underscore the need to diversify the country’s economy and exports.
“The fisheries and aquaculture sector can help Angola diversify its economy and move closer to achieving its development goals,” said Paul Akiwumi, director of UNCTAD’s division for Africa and least developed countries.
He said Angola can create more jobs, trade opportunities, boost food security, improve livelihoods and reduce poverty by tapping more into the blue economy – the sustainable use of ocean resources for economic growth.
Rwanda sets out strategy to spur e-commerce growth (UNCTAD)
As a landlocked economy undergoing massive transformation, Rwanda is increasingly gaining international attention for its forward-looking digital policies.
Such policies, in part, aim at boosting the country’s emerging digital economy through a coordinated “whole-of-government” approach, backed by a national e-commerce strategy recently published by UNCTAD.
“The national e-commerce strategy of Rwanda marks an important milestone in strengthening the country’s policy framework for easing digital trade,” said Shamika N. Sirimanne, UNCTAD’s director of technology and logistics.
Rwanda, one of the most densely populated nations in sub-Saharan Africa, has made progress towards graduating from the UN’s category of least developed countries, where it has been since 1971.
With the new strategy, experts are optimistic that Rwanda will better capitalize on e-commerce for the benefit of businesses and consumers, as well as optimize the delivery of government services.
“E-commerce growth is a unique opportunity to open access to international and local markets for our small and medium-sized enterprises,” said Jean Chrysostome Ngabitsinze, Rwanda’s minister of trade and industry.
Trade Policy Review: Liberia (WTO)
Liberia is a natural resource-based economy exporting mainly iron ore, gold, and natural rubber (together accounting for about 80% of merchandise exports), as well as palm oil, timber, and diamonds. It has the second-largest shipping registry in the world after Panama. However, the per capita income of Liberia’s 5.2 million people was approximately USD 673 in 2021, which is less than USD 2 a day, and about half of the population remains in poverty. Net remittances (about 7% of GDP in 2020) and foreign aid (about 19% of GDP) are important to the economy. Key factors holding back Liberia’s economic development include poor infrastructure, inadequate investment in human capital, and corruption.
Trade plays an important role in the economy. Trade in goods and services was equivalent to about 72% of GDP in 2021, and trade taxes collected at the border contributed over 40% of tax revenues. The Government’s Pro-Poor Agenda for Prosperity and Development 2018-2023 aims to promote exports to other ECOWAS countries, which currently are marginal. Liberia lacks reliable and up-to-date trade data. Based on available information, most of its exports are destined for the European Union, followed by Switzerland and the United States. Imports come mainly from India, followed by ECOWAS countries, China, and the United States. Liberia is a net importer of food and relies entirely on imported petroleum products.
African trade and integration
African free trade area could spur sustainable growth: UN chief (UN News)
Mr. Guterres was speaking on the final day of the annual Africa Dialogue Series in New York, where the focus this year was on accelerating implementation of the African Continental Free Trade Area (AfCFTA) – set to be the largest in the world. He said the pandemic brought high food and energy prices, made worse by the Russian invasion of Ukraine, exacerbating poverty, inequalities, and food insecurity.
Governments have also faced rising interest rates, increasing the potential for debt, while climate change has created deadly floods and drought, contributing to the risk of hunger.
“Guided by the 2030 Agenda for Sustainable Development and the African Union’s Agenda 2063, we must ramp up our efforts and harness the full potential of trade and industrialization to advance sustainable, inclusive growth,” the UN chief told participants.
He said the AfCFTA is set to be an engine of that growth. The Secretary-General stressed that realizing the AfCFTA promise calls for action across four critical areas, starting with boosting access to financial resources and investment.
The ECA’s Country Business Index – a tool to enhance private sector’s role in AfCFTA implementation (UNECA)
To better understand how African businesses are approaching the AfCFTA and how it can best support the private sector through trade, ECA developed the AfCFTA Country Business Index (ACBI) with the financial support of the European Union (EU). The Index enables relevant policymakers to identify bottlenecks in intra-African trade at a country level, which identifies the barriers impeding effective AfCFTA implementation from the perspective of the private sector.
Recently, the ECA held an Expert Group Meeting (EGM) to present the methodology and findings of the Index to inform the implementation of the AfCFTA.
Opening the meeting, ECA Deputy Executive Secretary and Chief Economist, Ms. Hanan Morsy said, “The ACBI is the first comprehensive tool based on robust methodological framework for data collection and analysis through which businesses can voice their views on the implementation of the AfCFTA. The ACBI findings make a significant contribution to Africa’s development Agenda by identifying bottlenecks in trade regimes that need to be addressed to ensure a more inclusive trade under the AfCFTA.”
African Trade Policy Center Director, Melaku Desta, emphasized that the success of the AfCFTA depends on its implementation and the participation of the private sector, which needs to understand, own, and drive it and aim to take advantage of the opportunities the Agreement offers. “Through the ACBI, we are contributing to make sure that business communities are in the driving seat in the implementation of AfCFTA,” he added.
Keys to Unlocking the Full Potential of the AfCFTA – A Case Study for Central Africa (UNECA)
Free trade under the AfCFTA Agreement officially started on 1 January 2021. In response, Central African governments began developing national AfCFTA implementation strategies with the support of the ECA and its partners. A sub-regional AfCFTA strategy for Central Africa is also under development. The AfCFTA is a key opportunity for Central African governments to build upon regional integration strategies, aligning their national trade strategies as well as industrial strategies, to enhance intra-regional trade as well as trade with continental partners. Trade strategies are linked to the productive capacity of each country, and therefore the development of trade strategies re-quires direct linkages with the National Industrialization Plans which, for Central Africa, advocate industrialization based on natural resources and driven by trade, in line with the Douala Consensus. At the sub-regional level, the two regional economic communities (ECCAS and CEMAC) stressed the urgency of developing a Master Plan for Industrial Development and Economic Diversification of Central Africa (PDIDE-CA) in the context of the AfCFTA.
Preliminary results show that liberalizing tariffs within the African continent would lead to overall increases in trade among member countries of the ECCAS across all products, except for extraction products which decrease. Trade between ECCAS members and the rest of the continent increases across all products. Extra-continental trade decreases. The most important increases in trade for ECCAS as a subregion occur for heavy and light manufacturing as well as processed food. While the largest current increases in trade for the ECCAS subregion represent import substitution (rest of world imports replaced by rest of Africa imports), simulations illustrating the implementation of economic diversification and industrialization plans are anticipated to increase trade within the ECCAS subregion as well as boost exports to the rest of the continent.
The African Institute for Economic Development and Planning, in collaboration with the ambassadors of the African group of the diplomatic corps accredited to Senegal, organized a High-level round table on The status, challenges and prospects of the African Continental Free Trade Area (AfCFTA) and the Single African Air Transport Market (SAATM) on Wednesday 24 May 2023.
This round table is a IDEP contribution to the celebration of Africa Day, celebrated on May 25, and that coincides this year with the celebration of the sixtieth anniversary of the Organization of African Unity (OAU), now the African Union (AU), under the slogan “Our Africa, Our Future”. It is also during this year 2023 that UNIDEP celebrates its 60th anniversary.
This year, the theme chosen is in line with the African Union’s 2023 theme of “The Year of the AfCFTA: Accelerating the Implementation of the African Continental Free Trade Area”. The theme aims to generate greater political commitment to trade as a development agenda for Africa. It will serve to mobilize solutions and solidarity to turn this vision into reality, with a view to building linkages with member states, AU organs, private sector actors, development partners and other stakeholders, who have important roles to play in accelerating the implementation of the AfCFTA.
“Both projects, AfCFTA and SAATM, are linked and reinforced each other. The AfCFTA has amongst other specific objectives to contribute to the movement of capital and people and facilitate investments. An effective functioning of the SAATM, on its turn, would allow residents of the region gain in comfort and choice of airlines, reduced flight times, business opportunities, and strengthened cultural ties through the progressive development of business and leisure tourism” highlighted Karima Bounemra Ben Soltane, IDEP Director.
Collective action can “move mountains” for Africa (UNECA)
Deputy Executive Secretary and Chief Economist of the Economic Commission for Africa (ECA), Hanan Morsy, has called for continued collective action in support of the Africa High-level Working Group on Global Financial Architecture (HLWG). “Our key objective is to build African consensus on what needs to be done and amplify the continent’s voice on the global stage,” said Ms. Morsy, adding, “The work of this group (HLWG) shows that when we come together, we can move mountains.”
“Debt service composes 22% of revenue” in Africa, limiting countries’ ability to make essential investments in health, education, and infrastructure to help operationalize the AfCFTA.” Ms. Morsy underscored the urgent need to fix the global debt architecture so that countries in debt distress can obtain swift and effective debt restructuring.
Trade has been at the core of life in developing and developed countries alike for many centuries and remains the life-blood of Basotho to-date. Over the years we have added our footprint in the flow of ideas, people, and goods & services, by innovating our trade facilitation processes. As we highlight the importance of the AEO Programme we must not lose sight of the bigger picture in the international trade facilitation programmes. The Authorized Economic Operator is one of those facilitative programmes that can enhance efficiencies in international trade as a way to quicken the drive for trade competitiveness.
in the context of rising global trade issues, regional trade facilitation mechanisms are a key strategy to boost existing and emerging trade arrangements, reducing costs to trade, and fueling inclusive growth. Such a mechanism can also make a difference in our ability to face the long-term challenges confronted by our region by facilitating market access, strengthening value chains, and boosting our regional economy.
The Authorized Economic Operator Programme directly complements the WTO Trade Facilitation Agreement’s Article 7.8, which is in relation to Expedited Shipments. The implementation of this provision is especially important at a time of escalating costs in terms of transportation of goods. Despite the surge in international shipping costs, it is my belief that developments in streamlining trade facilitation could partially suppress such an increase in cost of trading across borders. Whilst undertaking various reforms to implement. The TFA in respective countries, fostering regional cooperation is critical to tackling vulnerabilities of regional value chains. There is a wealth of distinct experiences and institutional frameworks across countries, and this underscores the importance of mutual learning and experience sharing. Together we can continuously agree on a set of key measures, where collective action can reduce the time and cost of trading across borders.
SADC and Member States step up efforts to attract Foreign Direct Investment (SADC)
The SADC Secretarial held the SADC Regional Focus Forum at the 12th Edition of AIM Global 2023 to attract FDI under the theme ”Infrastructure Development in Support of Industrialisation and Regional Integration”. The SADC Regional Focus Forum hosted two High-Level Panel discussions on Coordination and Investment Opportunities for Unlocking the Development of Regional Infrastructure Projects; and on Industrial and Value Chains Development.
In her opening remarks at the Forum, Ms Stella Chimwemwe Ng’oma, Director Investment Promotion and Facilitation, Malawi Investment and Trade Centre, said SADC desires to discuss good practice in public-private investment partnerships and create a mechanism to develop cross-cutting networks involving Member States, investors, bankers, development partners in order to re-engineer investment plans of Member States to be more catalytic and dynamic tools of investment attraction for sectoral development.
She said Member States recognise that despite SADC having made significant progress in regional infrastructure development, the economic transformation of the Region will require adequate and functioning infrastructure that will guide it towards front-loading industrialisation in the context of evolving technologies. This means that the Infrastructure Development in support of Regional Integration will aim towards interconnected, integrated, and quality seamless infrastructure and networks, including cross-border infrastructure, which will be pivotal in facilitating the movement of people, goods, services, and knowledge.
SADC convenes its Annual Financial Inclusion Forum (SADC)
The Southern African Development Community (SADC) Secretariat, through the European Union-funded Support to Improving the Investment and Business Environment in the SADC Region (SIBE) Programme, in conjunction with its partners FinMark Trust, United Nations Capital Development Fund (UNCDF), and the SADC Banking Association, convened its Annual Financial Inclusion Forum to discuss, among others, the proposed new five-year SADC Strategy on Financial Inclusion and Small and Medium Enterprise (SME) access to finance, in Johannesburg, South Africa, from 18th to 19th May 2023.
Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way. Several SADC Member States have developed strategies on financial inclusion in order to improve access, uptake, and utilisation of quality financial services and products for consumers and SMEs for effective participation in the SADC Industrialisation Strategy and Roadmap.
In his keynote address at the opening of the Forum on 18th May 2023, Honourable Karabo Gare, the Minister of Entrepreneurship of the Republic of Botswana, underscored the importance of Financial Inclusion in many African countries, where the informal sector relies heavily on remittances, savings groups, and credit associations. Financial inclusion plays a significant role in improving livelihoods, contributing to sustainable economic growth, promoting stability, and can support industrialisation, which is core to SADC.
However, achieving meaningful Financial Inclusion is not without its challenges as there are several barriers that hinder access to financial services, particularly for marginalised and vulnerable populations. These barriers include inadequate infrastructure, limited financial literacy, high transaction costs, rigid regulations, and discriminatory practices. Addressing these barriers requires a comprehensive approach involving governments, financial institutions, regulators, and civil society organisations.
The Southern African Development Community (SADC) Ministers responsible for Agriculture, Food Security, Fisheries and Aquaculture met through videoconferencing on 19 May 2023, to review progress in the implementation of the SADC relevant sectoral programmes, projects, and related strategies under the Regional Agricultural Policy (RAP), in line with the Regional Indicative Strategic Development Plan (RISDP) (2020-2030).
During her welcoming remarks, the Deputy Executive Secretary highlighted that the region experienced numerous challenges in recent times, including severe droughts and floods which adversely affected the agricultural sectors and food security. As a result, this led to the loss of, lives, revenue, jobs, and livelihoods. She added that overfishing led to a depletion of fish stocks, thereby affecting the livelihoods of many citizens in the coastal towns, hence the need for sustainable solutions to improve food security.
EAC Partner States’ commitments key to implementation of Common Market Protocol (EAC)
East African Community (EAC) Partner States’ commitments to the free movement of capital, services and goods is the bedrock of trade integration in East Africa, EAC Secretary General, Hon. (Dr.) Peter Mathuki, has said.
Dr. Mathuki said that the commitment of Partner States was especially critical in the removal of tariff and non-tariff barriers and the harmonisation of standards. Dr. Mathuki said trade integration was crucial particularly now that the Community is on a trajectory of expansion with the admission last year of the Democratic Republic of Congo even as the Federal Republic of Somalia awaits her turn to join the bloc.
The Secretary General said that the Community was looking towards not just a borderless East Africa but a borderless continent to spur intra-regional and intra-continental trade as is happening in Europe and other parts of the world.
The Competition Authority of Kenya (CAK) and the East African Community Competition Authority (EACCA) have entered into a Memorandum of Understanding (MoU) to ensure execution of their respective mandates enhances regional integration and cross-border trade and investment.
The MoU lays out modalities through which the agencies will mitigate competition infringements with cross-border effects, as well as foster transparency and predictability with regard to multijurisdictional merger notifications in order to reduce transaction costs for businesses.
Further, the agreement facilitates information sharing particularly during joint investigations, market inquiries and studies, which shall be prioritized so as to safeguard the competition process and protect consumers in the region, while respecting our respective laws and policies.
President Ruto urges the Committee of Experts Drafting the Constitution for the EAC Political Confederation to have the first draft by June 2024 as he pledges US$1 million to support the process.
President Ruto said that East Africans wanted to live together and do business regardless of national boundaries and urged EAC Partner States should therefore endeavour to catch up with them and actualise the Political Confederation as fast as possible,” said President Ruto.
Dr. Ruto cited prosperity for the region, strategic economy and security and the fact that East Africans were peoples of the same origins as the major reasons why the region needs to integrate and embrace the unity of the region.
President Ruto said that a borderless Africa would benefit from the prosperity that comes with integration, noting that integration would provide for a bigger market for the goods and services produced by the people of the region.
Botswana will host High-Level Africa Regional Review Meeting of the Vienna Programme of Action to address challenges facing LLDCs. The meeting will be held under the theme, “From Vienna to Kigali: towards a new decade of partnerships for a transformative Programme of Action for LLDCs” in Gaborone, Botswana from 29-30 May 2023.
LLDCs are countries without territorial access to the sea as a result isolation from world markets and high transit costs impose serious constraints on their overall socio-economic development. For LLDCs, their seaborne trade almost always must transit through other countries, mostly also developing countries—a process which involves dealing with cumbersome border-crossing procedures and inadequate transit transport infrastructure. Thus, although LLDCs already face other development challenges, they also face substantially increased costs for trade and transport because of their geographic location.
The African Development Bank Group’s 2023 Annual Meetings officially opened on Tuesday, with a clarion call by African leaders, together with the Bank’s President, Dr Akinwumi Adesina, to ramp up financing to meet Africa’s urgent climate action goals.
In his welcome remarks, Adesina drew attention to the vast gap in resources for climate action. He said while Africa’s cumulative climate financing needs had been estimated at $2.7 trillion between 2020 and 2030, climate financing resources were only flowing to Africa in trickles. “Africa receives only 3% of global climate finance, of which 14% is from the private sector, the lowest in the world,” Adesina said.
In his opening remarks, Egyptian President Abdel Fattah El-Sisi said the complex challenges facing countries around the world, and especially those in Africa, needed what he described as creative solutions. “This requires non-traditional ideas to explore financing options, to contribute to pushing the wheel of much-needed projects, particularly in the fields of addressing climate change challenges and sustainable development,” President El-Sisi said.
I heard that we should have a just and fair energy transition, and assure that we have energy access, affordability, and security for Africa. That Africa needs to use its natural gas for solving its energy challenge, including gas to power, liquified natural gas for cooking to save the lives of millions of women, who die every single year using dirty fuels, charcoal, and firewood; and there are children that die with them for just trying to make what we take for granted – making a decent meal for their families.
We heard about the reform of the global financial architecture, and how critical this is, and the reforms should strengthen, not diminish, the roles of the multilateral development banks that are in the regions like ourselves; because it’s not just the global public goods that matter; global public goods land in regions, in countries, in communities; and the regional multilateral development banks know their regions, are present in their regions, have strategies for their regions, are trusted by their regions and deploy policy instruments in dialogue with their regions better than anybody else can do because they are trusted in those regions.
Africa is set to be the second-fastest growing region in the world after Asia in 2023-24, demonstrating the resilience of its economy despite dealing with multiple global shocks. But the projected growth will depend on global conditions and the continent’s ability to bolster its economic resilience, the African Development Bank’s 2023 African Economic Outlook report has found.
The report, launched on Wednesday, forecasts that Africa will consolidate its post-Covid-19 pandemic recovery to 4.3% GDP growth in 2024 from 3.8% in 2022. Some 22 countries will record growth rates above 5%, it says. It recommends robust policy actions, including incentivizing green industries and providing guarantees at scale to de-risk private sector investments in managing natural capital across the continent.
In its latest annual report released on 25 May 2023, the African Development Bank Group highlights its critical contributions to the continent’s development and the wellbeing of its people in 2022.
Against the backdrop of a continent still grappling with the residual impact of the COVID-19 pandemic, the 2023 edition of the Annual Development Effectiveness Review, titled ‘Enhancing Africa’s Resilience’, reflects on the impact of multiple shocks to the continent.
In 2022, the Bank’s bold response to the challenging operating environment saw it leveraging its resources, technical expertise and role as partner of choice among African countries, to deliver tangible development results across the High 5s. The result: 12.3 million people gained access to new or improved water and sanitation services while another 4 million people benefited from the Bank’s private sector investee operations. To support the continent’s economic development and connectivity, the Bank also facilitated the construction or rehabilitation of 833 kilometres of roads.
Another milestone in the report shows investments in 2022 reaching $8.2 billion, signalling a return to pre-pandemic levels.
DP World And Standard Bank Partner To Expand Trade Finance In Africa (Africa.com)
The continent’s largest bank becomes the first African bank to partner with DP World Trade Finance. African companies looking for trade finance will now be able to seamlessly access working capital from Standard Bank via the DP World Trade Finance platform.
DP World Trade Finance connects business with financial institutions as a fintech platform while also directly offering trade finance facilities on its own. It offers businesses a single window to access trade finance solutions – customers can simply apply for credit on the digital platform, which will present them with the best options from global financiers who may otherwise be out of their reach. Access to finance is one of the biggest barriers for businesses seeking global trade opportunities, evidenced by the struggle that many businesses face in securing the upfront funds required to move cargo.
The President of the Union of Comoros and Chairperson of the African Union (AU), President Azali Assoumani has pledged support for the realisation of the mandate of the Pan-African Parliament as the legislative arm of the AU. He was speaking as a Guest of Honour at the opening of the Second Ordinary Session of the Sixth Parliament, which is currently underway in Midrand, South Africa, under the AU theme for 2023, “Accelerating the implementation of the African Continental Free Trade Area (AfCFTA)”.
H.E. Assoumani further encouraged African legislators to help establish appropriate conditions to promote socio-economic development in the continent.
“Our continent is indeed full of many natural resources with the potential to become one of the largest markets in the world in the years to come, if we create, right now, the appropriate conditions, to promote socio-economic development for a sustainable economy. We have succeeded to set up the African Continental Free Trade Area (AfCFTA), and it has become our continental priority. The Assembly of Heads of State and Government of our Union gave me the mandate to prioritise mechanisms to accelerate the implementation of this important free trade agreement,” he added.
Muddled priorities continue to plague EU-Africa trade policy (EUROPP)
As geographical neighbours, Africa and Europe have a long trade history. But the current trade policy priorities of the two neighbours are in a muddle. This is due to the balkanising effect of the EU’s patchwork of trade agreements across the African continent at a time when African countries are pursuing an ambitious economic integration reform agenda through the African Continental Free Trade Area (AfCFTA). As shown in a new edited volume, fixing this misalignment in trade policy priorities requires a reset.
The EU is Africa’s most important trading partner. As a source of imports, the EU accounts for 26 percent of all imports in terms of value into African countries, followed by China (16 percent), and intra-African imports (15 percent), on average between 2018 and 2020, according to IMF data. Other partners such as the US (5 percent) and the UK (2 percent) are important, but much less significant sources of imports into African countries.
The destination of Africa’s exports closely mirrors, in order of economic importance, Africa’s imports. The EU is Africa’s most important destination for exports – also accounting for 26 percent of all African exports in terms of value, followed by intra-African exports (18 per cent) and China (15 percent) between 2018 and 2020. India (6 per cent) the US (5 percent), Turkey, Brazil, UK, Japan, and Russia (each under 3 percent) are smaller export destinations.
The economic impact of EU’s Green Deal on farmers in Eastern Africa (The East African)
The European Commission is adopting intermediate proposals in its international climate policy as outlined in the European Green Deal.The Green Deal provides a road map for a socioecological transition to a low-carbon future and the building blocks for a green economic growth strategy to address climate change, energy, and biodiversity. However, the implications of the EU Green Deal (EU GD) for Africa are multifaceted.
Most prominently, the stringent policies outlined in the Farm to Fork (F2F) and Chemical Sustainability Strategies will greatly affect global trade in agricultural inputs and outputs and, by extension, the economies of African countries that greatly depend on agriculture.
Economic evaluations show an introduction of a unique array of “sustainability” requirements whose compliance costs will be borne by the farmers as implementation gets underway.
The new additional requirements threaten the livelihoods of many small producers and may significantly reduce the export earnings of East African countries such as Uganda, which is the second largest horticulture exporter in the region.
Horticultural exports from East Africa to the EU are valued at more than $2.3 billion, with smallholder farmers contributing up to 70 percent of the export volumes. The study revealed that farmers would be overburdened by the new regulations because substantial costs will be introduced with the new specifications on standards, certifications, logistics, and carbon border adjustment mechanisms (CBAM).
Bumper US$3 billion trade boost in Hunan bid to become China-Africa hub (South China Morning Post)
Efforts by Hunan province to position itself as a hub for China-Africa trade are bearing fruit, with a record 90.4 per cent trading increase to US$3.14 billion in the first four months of 2023 on the same period last year.
Private enterprises are driving the boost, with 1,471 companies accounting for 20 billion yuan (US$2.8 billion) – more than 90 per cent of Hunan’s African trade total – over the period, according to Changsha Customs data.
The number of Hunan companies trading with Africa so far this year is also on the rise, increasing by 18 per cent to 1,558 compared to the first four months of last year.
China woos Horn of Africa by fragmenting diplomatic engagements, investments & trade (Republic World)
The People’s Republic of China has been fragmenting diplomatic engagement with the Horn of Africa (HoA) to cement its foothold in the conflict-ridden region. Chinese President Xi Jinping’s administration has been shifting the dynamics of its geopolitical influence in sub-Saharan Africa as the United States and its European allies made an exit, including the ex-colonial ruler France which was asked to pull out its troops from insurgency-hit Burkina Faso. The Horn of Africa comprises six states— Ethiopia, Eritrea, Sudan, Djibouti, Somalia and the self-governing state of Somaliland—of whom five are sovereign states and one is de facto, where China is now expanding its footprint.
On Thursday, May 25, China announced that it is stepping up its cooperation with the African countries by sending more emergency food aid to the Horn of Africa. China’s Foreign Minister Qin Gang said in Beijing on Thursday that PRC will fund the reconstruction of Ethiopian infrastructure destroyed in the year-long Tigray war, according to the Beijing-based newspaper South China Morning Post.
China has been weaponising investment on foreign soils as a part of its ’debt-trap diplomacy’ to fulfil agendas of economic and military expansionism abroad. In 2022, Beijing sponsored the first-ever Horn of Africa Peace, Good Governance, and Development Conference in the Ethiopian capital of Addis Ababa, which China’s ruling Communist Party touted as a “model country” under its $126 billion Belt and Road initiative.
G7 Summit: Africa seeks new role as nations eye its resources (BBC News)
Africa will not accept that it “should just continue to be a source of raw materials” for the rest of the world, the African Union’s Trade Commissioner has told the BBC. Albert Muchanga says instead his continent wants a future of “genuine and mutually beneficial relationships” with its trade partners.
It comes as the AU’s chair has been invited to the G7 summit in Japan amid intensifying competition with China for Africa’s natural resources.
Japan’s Prime Minister Fumio Kishida visited Egypt, Ghana, Kenya and Mozambique at the start of this month as he sought to bolster African support for his efforts to counter Chinese and Russian influence on the continent, as well as in regards to Taiwan and Ukraine.
Speaking in Maputo on 4 May he said: “Many countries of the so-called Global South are hurt and suffering from high food and energy prices. The cause of this issue should be traced to Russia’s invasion of Ukraine.”
Mr Muchanga welcomes the recognition of Africa’s problems. He says the disruption caused by the Covid pandemic is also to blame for problems that are “multi-dimensional”.
Global economy news
State and Trends of Carbon Pricing 2023 (World Bank)
Direct carbon pricing instruments, key policy to decarbonization, now cover almost a quarter of global greenhouse gas emissions, according to a new World Bank report. This is despite the challenging context for governments facing high inflation, fiscal pressures, and energy crises.
“Carbon pricing can be an effective way to incorporate the costs of climate change into economic decision making, thereby incentivizing climate action.” said Jennifer Sara, Global Director for Climate Change at the World Bank. “The good news from this report is that even in difficult economic times, governments are prioritizing direct carbon pricing policies to reduce emissions. But to really drive change at the scale needed, we will need to see big advances both in terms of coverage and price.”
How markets and consumers can drive sustainability (UNCTAD)
Ensuring responsible consumption and production patterns – as outlined in the UN Sustainable Development Goal 12 – requires minimizing environmental impacts, enhancing resource efficiency and reducing waste. In this regard, experts point out that competition and consumer protection policies are uniquely placed to help.
“Competition and consumer protection policies are conducive to improving the efficiency and fairness of markets and are therefore well placed to serve public policy goals,” said Teresa Moreira, head of competition and consumer policies at UNCTAD, while opening a high-level session of the UN Trade Forum 2023 on 9 May.
Their conversations revolved around a new UNCTAD report, which examines connections among sustainability, consumer protection and competition policies.
What women in developing countries need to thrive in e-commerce (UNCTAD)
To make e-commerce a greater driver of shared prosperity, the world must urgently tackle the challenges facing women small business owners in developing countries. That was the message from experts at a meeting held during the UN Trade Forum 2023 on 9 May, where UNCTAD launched a new policy review of e-commerce through a gender lens.
The policy review examines the opportunities for women – particularly those living in developing countries – to harness digital trade for economic empowerment, and the challenges they face.
The report cautions that the shift to digitalization, if not strategically managed, can reinforce pre-existing development and socioeconomic inequalities. It urges stronger policy action to create enabling conditions for all.
“Overcoming existing North−South disparities and addressing gender inequalities in society and the economy is vital, if e-commerce is to support the achievement of the Sustainable Development Goals,” said Simonetta Zarrilli, head of UNCTAD’s trade, gender and development programme.
All OECD countries need to step up efforts to boost gender equality (OECD)
Despite progress in recent years, more work needs to be done, across all OECD countries, to secure gender equality, with women and girls still facing inappropriate disadvantages and barriers in most spheres of social and economic life, according to a new OECD report.
The report Joining Forces for Gender Equality: What is Holding us Back? shows progress in some policy areas, such as paternity leave, pay transparency, flexible work opportunities and higher representation of women in leadership roles. However, major challenges remain, including the need to boost girls’ participation in educational fields promising better job opportunities, lower wages for women than men, barriers to entrepreneurship and self-employment for women, gender gaps in lifetime earnings and pension income, women’s disproportionate share of unpaid care and housework and women’s underrepresentation in politics and government leadership positions.
International trade statistics: trends in first quarter 2023 (OECD)
Following two consecutive quarters of decline, G20 merchandise exports rebounded in value terms in Q1 2023, as measured in current US dollars (Figure 1 and 2). Compared to Q4 2022, exports increased by 2.2%, driven partly by the revival of economic activity in China. G20 merchandise imports contracted by 1.2%, largely reflecting easing energy prices. Growth in G20 services exports and imports are estimated at around 2.4% and 4.9% in Q1 2023, respectively, compared to the previous quarter and measured in current US dollars.
E-commerce negotiations maintain positive momentum, focus on key issues (WTO)
In his opening remarks, Ambassador George Mina encouraged WTO members to lift the rate of progress in the work of the small groups so that more articles can be “parked”. He underlined the importance of the e-commerce negotiations for the future of rulemaking and the digital economy.
Ambassador Kazuyuki Yamazaki urged members to achieve as much convergence as possible in the small groups before the summer break and asked members to show the necessary flexibility.
On the development aspect of the negotiations, Ambassador Yamazaki said: “We are seeking a balanced and inclusive outcome.” He noted that members should consider how they could achieve outcomes that are beneficial to both developing and developed members so that all participating members can benefit from e-commerce in an exclusive manner.
Members, partner organizations stress importance of boosting Aid for Trade disbursements (WTO)
The Organisation for Economic Co-operation and Development (OECD) reported to the Committee that preliminary data it collected showed total Aid-for-Trade disbursements suffered a year-on-year fall of 4.7 per cent in real terms in 2021 for a total of USD 47.7 billion, a decline mainly due to inflation.
Nearly all the disbursed amounts (97 per cent) went towards building productive capacity and economic infrastructure, with Africa receiving 40 per cent of this assistance. In terms of project commitments, the decline in 2021 was 22 per cent. The OECD described this as significant compared to the substantial growth in commitments registered in previous years. The OECD added that it expects to find further fluctuations in Aid-for-Trade flows in 2022 due to the impact of the war in Ukraine.
The Least-Developed Countries Group of WTO members also noted a drop in Aid-for-Trade disbursements to its members and other low-income countries, from USD 15.6 billion in 2020 to USD 13.5 billion in 2021, which it said was regrettable.
Other news from the WTO
Cotton meetings urge progress before MC13, discuss World Cotton Day 2023, FIFA-WTO work
Members share customs valuation experiences and practices since start of the pandemic
Members advance work on online notification portal, import licensing database
WTO members review ways to facilitate digital trade and electronic transactions
International organizations launch platform to promote access to subsidy information
New report looks at WTO technical assistance activities in post-pandemic era
